Facing an uphill battle is nothing new to Huawei. When Yang joined Huawei in the mid-1990’s, “We saw ‘seven mountains’ standing in front of us,” he said. Those included Ericsson, Nokia, Lucent, Alcatel, Nortel and others. Huawei was still largely unknown to the world.
Working at Huawei’s R&D division, Yang was a part of a team who designed Huawei’s first commercial GSM equipment, launched in 1998. He acknowledged that it was “a poor design,” not in the same league with its rivals. Nonetheless, Huawei went about selling the equipment “not in the rich market,” but in “the grasslands of northwest China,” said Yang. “People used to describe it as ‘GSM on horseback.’ We transported our GSM equipment by a helicopter and then we had to carry it on horses to where it needed to be installed.”
In the period between 1998 and 2000, Huawei’s learning curve trended up. “We worked day and night,” said Yang, “and really learned to catch up with the industry.”
Huawei’s first break came when the then number-four network operator in the Netherlands came knocking. This operator, looking for smaller GSM equipment for their first 3G network deployment, was told by Nokia that they’d have to wait 18 months. The Dutch operator turned to Huawei, which was eager for an opportunity in the Western market. “We sent 20 of our best engineers to the Dutch operator, and we designed a new type of GSM equipment. Part the equipment can be installed outside, while another part stays inside.”
Working with the Dutch, Huawei got its foot in the door in the West. But “we had no time to celebrate,” said Yang. Within less than a year, “bad news came. The Netherland’s largest operator, KPN, bought the number four operator we’d been working with.” The acquisition effectively left Huawei with no commercial contracts in Europe.
A second chance developed with a contract with Vodafone Spain. Huawei used this opportunity to improve the performance and power consumption of its 3G base station equipment, reaching par with Ericsson and Nokia.
But Huawei’s real breakthrough didn’t come until it decided to develop its SingleRAN technology. The goal of SingleRAN was to design a radio access network (RAN) technology allowing mobile operators to switch from GSM to UMTS network standards or use both simultaneously.
The technology required development of a software-defined radio device and a consolidated set of hardware components that would allow operators to purchase, operate and maintain a single telecommunications network and set of equipment, while supporting multiple mobile communications standards.
Yang still remembers a Saturday in Shenzhen, when he was climbing a mountain with his Huawei colleagues. The group included Richard Yu who later became the current CEO of Huawei Device. “While climbing, we heatedly debated whether we should work on the development of SingleRAN.” Pretty much everyone in the group, and others they reached via cellphone from the mountain, was against the idea. Technical challenges, anticipated product delays and costs were the main reasons most of the team shied away from the idea. “There were just too many risks,” recalled Yang. Then, while still climbing the mountain, Yu uttered a four-letter word and exclaimed, “We’ve got to do this,” according to Yang.
“If we don’t make this, we can never beat Ericsson,” said Yu.
Huawei perhaps most typically represents China's ambitions of getting ahead at any cost. They have learnt and adopted technologies invented in the western world and now under-cut the companies they learnt from. Their resilience is impressive. They have the advantage however of a captive market in China, a sympathetic government and a lower capital cost. It used to be that Huawei was synonymous with cheap prices but they are now steadily improving the quality of their products.
Definitely a company to watch.
Junko - A great, comprehensive story, with lots of details. Thanks. That comment by Shao Yang, that, "eventual success will emerge from employees’ collective memory -- including his own -- of how Huawei reached the heights it occupies today," is striking. Either it is a simple flowery language, or it is a window into his views of managing employees, keeping them inspired. Looking at one's own history, corporate, personal, or country, is a great way to inspire oneself.
a pack of wolves, correct. It is the Huawei's company culture.
I do not agree with writer's title that the biggest underdog. I checked the meaning of underdog, it means loser,weaker than the competitor. Actually, the main reason of Huawei's success is its spirit of wolf. They never feel weaker than their competitors.
"Underdog" is a metaphor. Huawei had been perceived as an 'underdog' by the West for decades. Huawei leverages that perception to improve itself; it never forgets its humble beginning; it's never satisfied with where it is; it always strives to work harder.
Junko, I would have used "wolf" instead of a "dog" as the qualifier to your article's title. Their "success at any cost" approach has bordered on at times unethical to get things done. Employees from competitions have often been hired not because of what they are capable but for what they knew about Huawei's competition's technology.
I think they still lack some of the marketing sophistication of typical top tier companies I have seen, and behind the scenes I suspect there are still ways they are catching up in technology too, like still working on their first router chip
I once had a chat with some Huawei people, including engineers and marketers. Junko's observation is valid.
Yes, Huawei appeared thinking that they had a lot of room to improve. When I asked why they were so successful, a chilling answer was, "Our competitors go to graves themselves."
This reminded me of Marconi, a BT preferred supplier, who buried them themselves.
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